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Continued from preceding page

fix Israel's domestic problems,"
she said.
David Gad-Harf, executive di-
rector of the Jewish Communi-
ty Council, feels Israel's
government received a strong
message about its internal prob-
lems.
"Israelis wanted a change in
leadership, and a change in poli-
cies," he said. "Many domestic
issues have seemed unattended

Win Washington Revive
Loan Guarantee Talks?

JAMES D. BESSER

Washington Correspondent

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FRIDAY JUNE 26 1999

1191.1
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to in favor of pursuing a right-
wing settlement policy."
Mr. Gad-Harf is uncertain
what this means for U.S.-Israel
relations.
"The Bush administration
seems gleeful at the results," he
said, "but we'll have to see what
happens in November, when
Americans cast their votes. The
picture could change again." ❑

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fficially, Washington re-
acted with studied cau-
tion to the stunning upset
by Israel's Labor Party in this
week's election.
Unofficially, there was elation
in the administration and re-
newed optimism in Congress
that at least some of the $10 bil-
lion in loan guarantees request-
ed by Israel might be
forthcoming before the end of the
year.
While Israel's friends in Con-
gress cautioned against expec-
tations of an immediate
warming of relations, there was
a clear undercurrent of satisfac-
tion as the news began trickling
in on Tuesday.
"What all of us have been hop-
ing for is that Israel will be able
to form a stable government —
with a sufficient number of seats
in the Knesset that they can
form government policies with-
out pandering to splinter
groups," said Rep. Ben Cardin,
D-Md.
The Labor victory may be a
significant boost to the adminis-
tration's ability to work effec-
tively with leaders in Jerusalem,
he said.
The Israeli election came in
a week when the House was con-
sidering the foreign aid bill for
fiscal year 1993; there had been
strong indications that key leg-
islators would seek big overall
cuts to the overall aid program,
with up to $100 million in cuts
for Israel.
The Israeli election results
may decrease the likelihood that
Congress will break the "ear-
marks" that have traditionally
protected aid to the Jewish state.
Rep. Stephen J. Solarz, D-N.Y.,
like many officials in Washing-
ton, predicted that negotiations
over Israel's request for loan
guarantees would be resumed
very soon in Washington since
the Labor Party, the big victor
on Tuesday, favors establishing
a self-rule for the Palestinians in
the West Bank and Gaza.
There has been widespread
speculation in Washington that
a Rabin victory would give Pres-
ident Bush the opportunity to

make a dramatic gesture on loan
guarantees — thus improving
his sagging popularity with the --
Jewish community, a key elec-
toral bloc in the upcoming elec-
tion.
But that depends on some
clear signals from Mr. Rabin and
on indications that his new gov-
ernment will have the political
strength to take a stand against
further settlements.
Instead of an immediate ges-
ture from Washington, Rep. Lar-
ry Smith, D-Fla., expects "quite
a dance of courtship between the
two governments" before the'-'
loan guarantee issue is settled.
Administration officials are
hopeful that a new Rabin gov-
ernment will provide a major
boost to the Middle East peace--
process. There are widespread
expectations that the new Israeli
government will move quickly to _
conclude a limited autonornS.
agreement with the Palestini-
ans.
The Rabin victory will put )
pressure on the Arabs to show
their willingness to move for-
ward, since they have blamed
the lack of progress in peace' -
talks on Israeli "intransigence."
It also may put new pressure on
the administration to press for
an end to the Arab boycott,' (1
against Israel and for Arab
recognition of Israel's right to ex-
ist.
c: I
But the ongoing Middle East
talks have become a much low-
er priority for an administration
that is now fighting for its po--
litical life — a fight that is fo-
cused mostly on the domestic
agenda.
"My impression is that the
president and his top advisors
have other things on their minds
now," said Mideast expert
William Quandt. "I don't think
it's likely they will be pushing
very hard on the Middle East un-
til after the elections here."_
Some pro-Israel activists 7
warned against excessive ex-
pectations about a quick turn-,
around in Israeli policy.
`The administration would do
will to draw its conclusions only
after the new government de-
velops," said Dan Mariaschin, di-
rector of international and public
policy for B'nai B'rith. ❑

'

